Ford halts engine production at Merseyside factory

Ford is shutting down its Merseyside plant for at least a month and slashing shifts at a Dagenham engine factory as the car industry is battered by a global microchip shortage. The US company will temporarily halt production on May 10 at its Halewood factory, which employs 700 staff making engines for models including the Fiesta and Focus. Work at the company’s Dagenham site in east London is also being sharply reduced in cuts that will affect 1,200 staff.

More than half of British automotive production has now been scaled back at some point in the past few months due to the crisis, with similar action at Jaguar Land Rover, Honda and Nissan. A senior source at one UK car manufacturer said: “The lack of supplies means we are managing production on a day-to-day basis.”

Production of one engine model at Halewood will stop for six weeks, with another paused for a month. At Dagenham, Ford is moving to one eight-hour shift a day for Transit van diesel engines, starting on Monday and lasting for three weeks.

Workers making V6 and V8 engines at the plant will move to a single shift from the start of May. Ford sites in Spain, Germany, Romania and Turkey are also cutting staff shifts and shutting for between a week and two months, with action being taken in the US and Canada too. Car makers around the world are fighting to get their hands on the microchips essential for running modern vehicles, with stocks not likely to recover until 2022.

Firms slashed orders for the chips when the economy shut down as Covid took hold – then found themselves unable to secure new supplies as lockdowns lifted and demand increased again, because chipmakers had turned their focus onto meeting soaring  demand for laptops, TVs and other consumer devices from families stuck at home. David Leggett, an analyst at GlobalData, said: “This is just latest in a long line of warnings and actions from vehicle companies being adversely impacted by shortages of semiconductors components. “Semiconductors govern multiple areas of vehicle functionality, and without them vehicles are simply not able to be finished for sale.

“It’s becoming clear that a short-term fix is increasingly unlikely. Indeed, the problem of semiconductor shortages and subsequent output disruption in the automotive industry could even worsen later in the year as market demand for vehicles rises.”   Ford has not built cars in Britain for almost 20 years but makes engines that are shipped worldwide.

Destinations include the plant in Turkey that makes the Transit van and American factories that make the F-150 truck.

Engines Ford builds in Britain are shipped as far as Turkey, where the company puts together its Transit vansCredit: Ford

About 630,000 engines were built at Dagenham in 2019 before the pandemic reduced last year’s output to below normal level levels. Last year Ford sold 4.2m vehicles, roughly one in 10 of them powered by engines made in the UK.  The closures follow similar announcements from a string of other firms.

On Wednesday, Jaguar Land Rover said it was temporarily halting work at two of its three car plants.

Last week it emerged Nissan planned to furlough 800 staff at its giant Sunderland factory – more than one in 10 workers – because of lower production volumes resulting from the chip shortage.

In January, Honda said its Swindon plant would shut for almost a week because of the problem.